Friday, October 17, 2008

Another flawed policy that won’t be implemented

Part of it aims to assist the transition of beneficiaries back into work by lifting the amount earned before abatement kicks in. The abatement threshold has been the same for the past 12 years. The abatement threshold for earnings lifts from $80 to $100 in 2010, to $120 in 2011, and $140 in 2012. A beneficiary earning $140.00 a week gets to keep $14 more a week in 2010, $28 more in 2011, and $42 more in 2012. That’s $728.00 a year more if they work every week.

Yet any beneficiary family with kids would get more per annum – even in 2012 - if they accessed their WINZ food grant allowances every year.

Labour wants the amount beneficiaries can earn before abatement to be the equivalent of ten hours pay at the adult minimum wage (currently $120) within five years, but will do nothing about it in the first 17 months. Actually it is doing nothing about it at all as the time the abatement threshold does get to be $120- in 2011 - it is unlikely that the minimum wage will still be $12 an hour as Labour has agreed to lift it in its next term of Government.

When Labour took office in 1999, the minimum wage was $7 an hour, and the threshold was more than 10 hours pay at the minimum wage. Labour has no intention of tagging the abatement threshold to an equivalent minimum wage rate as in 1999.

If the Government wants the abatement threshold to be the equivalent of ten hours of the minimum wage by 2012, this policy ain't it.How can Labour implement this policy with its current policy on the minimum wage given that both policies are linked?